Annual Report of Utv Software Communications Limited for Financial Year 2013-14
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ANNUAL REPORT 2013-14 ANNUAL REPORT OF UTV SOFTWARE COMMUNICATIONS LIMITED FOR FINANCIAL YEAR 2013-14 1 UTV SOFTWARE COMMUNICATIONS LIMITED ANNUAL REPORT 2013-14 CONTENTS Sr. Particulars Page No. No. 1 Company Information 3 2 Report of the Board of Directors 4 3 Auditors’ Report 13 4 Balance Sheet 16 5 Statement of Profit and Loss 17 6 Cash Flow Statement 18 7 Notes forming part of Financial Statements 20 8 Annual Report of Subsidiary Companies i. UTV Global Broadcasting Limited 48 ii. Genx Entertainment Limited 78 iii. UTV Entertainment Television Limited 106 iv. UTV New Media Limited 134 v. Indiagames Limited 157 vi. IG Interactive Entertainment Limited 185 vii. Ignition Entertainment Limited - (UK) 193 viii. Ignition Entertainment Limited (USA) 200 ix. Ignition London Limited 203 x. UTV Communications (USA) LLC 209 xi. UTV Games Limited 213 xii. True Games Interactive 221 9 Subsidiaries Information 224 2 3 ANNUAL REPORT 2013-14 Company Information NAME OF THE COMPANY UTV SOFTWARE COMMUNICATIONS LIMITED REGISTRATION NO. OF THE COMPANY U72200MH1990PLC056987 DATE OF INCORPORATION June 22, 1990 REGISTERED OFFICE 1st Floor, Bldg No. 14, Solitaire Corporate Park Guru Hargovindji Marg, Chakala, Andheri (E), Mumbai 400 093 BOARD OF DIRECTORS Mr. Siddharth Roy Kapur–Managing Director Mr. Nimish Shah- Director Mr. Charles Jacob– Director Mr. Sujit Vaidya – Director STATUTORY AUDITORS M/s. Price Waterhouse & Co., Bangalore Chartered Accountants 252, Veer Savarkar Marg, Shivaji Park, Dadar Mumbai-400028 REGISTRAR AND TRANSFER AGENT M/s. Karvy Computershare Private Limited, Plot No. 17 to 24, Near Image Hospital, Vittalrao Nagar, Madhapur, Hydrabad – 500081 Tel No. 0402420815-28 Fax No. 040 2340814 / 23420857 BANKERS Deutsche Bank Citi Bank HSBC Bank of America 3 UTV SOFTWARE COMMUNICATIONS LIMITED ANNUALANNUAL REPORTREPORT 2013-142013-14 DIRECTORS’ REPORT Dear Members, Your Directors take pleasure in presenting the 24th Annual Report on the operations of your Company for the financial year ended March 31, 2014 1. FINANCIAL HIGHLIGHTS: COMPANY STANDALONE (` in Millions) Particulars Year ended Year ended 2013-14 2012-13 Revenue from Operations 6,171.50 6,519.20 Other Income 190.91 237.38 TOTAL INCOME 6,362.41 6,756.58 Direct cost 6,254.11 5,959.79 Employee benefit expense 278.92 338.75 Depreciation, Amortization and Impairment Expenses 11.19 27.59 Finance cost 1,186.17 1,284.71 Other Expenses 881.87 449.31 TOTAL EXPENSES 8,612.26 8,060.15 LOSS BEFORE EXCEPTIONAL ITEMS AND TAX (2,249.85) (1,303.57) Exceptional items - 3,323.88 LOSS BEFORE TAX (2,249.85) (4,627.45) Less: Tax Expenses Current Tax - - Taxes paid pertaining to earlier years 0.71 - Minimum alternative tax credit entitlement written off 0.60 501.43 Deferred Tax - 250.00 LOSS FOR THE YEAR (2,251.16) (5,378.88) During the year under review the Company has incurred a loss of Rs. 2,251.16 Million on account of the operating losses primarily due to reduced margins from its movie releases as some co-produced movies were with limited rights and included profit sharing arrangements. Further, the company provided for some talent advances as per its accounting policy in view of postponement in commencing these projects. 2. BUSINESS OVERVIEW: The year was a very eventful one for the Media and Entertainment industry as it continued to witness changes in the regulatory and competitive environment. For the Company it’s been a year that has witnessed an exceptional run at the Movies, a consolidation of our lead in the Youth space in Television with bindass and a continuing endeavour to build our pipeline of Digital Games. Studios: 2013 was a rewarding and exciting year for us at the Indian box office. It was the biggest year for our movies in theaters as compared to any other Indian studio on the back of commercial blockbusters such as Chennai Express, Yeh Jawaani Hai Deewani and Race 2; and high concept films such as Kai Po Che, ABCD, Ship of Theseus, The Lunchbox and Shahid. Most of our movies set benchmarks showing evolving audience trends. The studio team worked with some of the best names in the industry and also launched and backed new talent in this past year. We produced India’s first 3D dance movie Any Body Can Dance which received a phenomenal response and now we’re developing the sequel; Kai Po Che also received an incredible response at the Berlin film festival and in cinemas worldwide; Chennai Express, our co-production with Red Chillies, set new box office benchmarks and Yeh 4 55 ANNUALANNUAL REPORTREPORT 2013-142013-14 Jawaani Hai Deewani which we released in India was also a box office sensation. Our Tamil production Settai, which was a remake of our Hindi comedy Delhi Belly, further strengthened our presence in the South market with its great performance. The success of our specialty releases The Lunchbox, Ship Of Theseus and Shahid reflect the strength of our marketing and distribution strategies. The slate this year was reflective of the philosophy UTV as a studio has adopted over the years, which is that we want to back all kinds of movies, so long as they entertain, and to preempt audience trends. Our films continued to explore new markets. The critically acclaimed blockbuster Barfi! had a successful mainstream release in Turkey and then also traveled to Taiwan, Mainland China and Hong Kong. Broadcasting: Bindass, the homegrown youth entertainment channel, has established itself as a cult among its audiences through shows that mirror society and its realities. The channel emerged as the leading youth channel and continued to build on its content pipeline with an all new show Yeh Hai Aashiqui. Through this show bindass showcased unique love stories which prove the age-old adage that love is the strongest emotion and can indeed triumph despite facing the most daunting of odds. Yeh Hai Aashiqui underlines the reality that today’s youth does not look at age, societal standing, the possible obstacles or even gender before falling in love. The show went on to become the leading show in the youth space. In the past year the channel also saw successful brand associations with new Advertiser Funded Programming such as Nokia Lumia 520 Speed, Nivea Kiss and Make Up, Rooftop Break ITC Bingo. UTV Stars, dedicated solely to Bollywood and its most sought after celebrities, went a step further in the past year to fulfil its brand promise of “touch, feel, believe” by taking some sought-after celebrities to key markets such as Chandigarh, Ahmedabad, Amritsar, Pune and more. Fans from these markets got a chance to interact with the celebrities while they indulged in shopping, visiting places of historical significance and more. There was an addition of more statues and tiles at the coveted Walk of the Stars property with superstar Rajesh Khanna, Shashi Kapoor, Jeetendra and Asha Parekh now gracing the property. UTV Action is a genre-specific movie channel showcasing fast-paced action films dubbed in Hindi. UTV Movies is the new age Hindi movie channel offering both viewers and advertisers a direct experience of the spirit of Bollywood through its programming and promotional engagements. UTV World Movies continued to showcase handpicked titles from across 40 countries. Games and Interactive: The digital arm of UTV was formed in May 2008 to carry forward the ideology of content creation for platforms such as games, original content for the mobile and web and more. The team continued to build on its pipeline of games including IPLCricket Fever 2013, the official IPL game across iOS, Android, Java and MRE platforms; Chhota Bheem and the throne of Bali on DTH; a game based on the blockbuster movie ‘Yeh Jawani Hai Deewani’ and the biggest hit of last year ‘Chennai Express’. 3. DIVIDEND: As the Company has incurred loss during the year, your Directors do not recommend any dividend for the financial year 2013-14. 4. SUBSIDIARY COMPANIES: As at March 31, 2014, the Company has the following subsidiaries viz. (1) UTV Global Broadcasting Limited and its wholly owned subsidiaries i.e. Genx Entertainment Limited and UTV Entertainment Television Limited (2) UTV New Media Limited, (3) Indiagames Limited (4) IG Interactive Entertainment Limited and its wholly owned subsidiary; Ignition Entertainment Limited- UK and further its step down wholly owned subsidiaries i.e. Ignition Entertainment Limited (USA) and Ignition London Limited (formerly known as Digi-Guys Limited) (5) UTV Communications (USA) LLC (6) UTV Games Limited and its subsidiary True Games Interactive (7) UTV TV Content Limited and its wholly owned subsidiary UTV Tele Talkies Limited, RB Entertainment Limited and UTV Sunlit Content Limited (Previously known as Vikatan UTV Content Limited) (8) Screenshot Television Limited and (9) First Future Agri & Developers Limited. As at March 31, 2014, UTV New Media Limited, IG Interactive Entertainment Limited, UTV Communications (USA) LLC, First Future Agri and Developers Limited, Screenshot Television Limited, UTV TV Content Limited and UTV Games Limited are wholly owned subsidiaries of your Company. As at March 31, 2014, UTV Global Broadcasting Limited is 88.65% subsidiary of your Company and Indiagames Limited is 56% subsidiary of your Company. 55 UTV SOFTWARE COMMUNICATIONS LIMITED ANNUAL REPORT 2013-14 The audited Balance Sheet, Profit & Loss account, along with the Directors’ Report and Auditors Report of subsidiaries of the Company as required under Section 212 of the Companies Act, 1956 (“Act”) have been attached with the Balance Sheet of the Company and a statement pursuant to Section 212 relating to Company’s interest in subsidiary Companies are annexed to this Annual Report. UTV GLOBAL BROADCASTING LIMITED (“UGBL”): UGBL was incorporated on June 6, 2007. UGBL was primarily engaged in the business of aggregating and distributing channels outside India (USA, APAC & Middle east) to various distribution platforms.